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Business News of Friday, 17 March 2017

Source: b&

Fuel prices to reduce further - gov't assures

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The Deputy Finance Minister-designate, Kwaku Kwarteng, has assured that fuel prices will see further reduction following the passage of amendments to tax laws governing the petroleum sector.

His assertion comes after the Institute for Energy Security (IES) projected that Fuel prices will fall by about 3% in the second pricing window of this month [March 2017].

The IES’s projection comes at the back of the drop-in Brent crude, gasoline and gas oil prices on the world market. Parliament yesterday approved for the removal and reduction of the Special Petroleum Tax, the Excise tax, and others by passing the Tax (Amendment) Bill, 2017, on Special Petroleum Tax (Amendment)Bill,2017, Special Import Levy(Amendment)Bill,2017 and Customs and Excise (Petroleum Taxes and Petroleum Related Levies) (Repeal) Bill,2017 to give government the legal backing to implement its programmes enumerated in the budget.

These amendments which are currently awaiting approval is expected to bring relief to businesses and Ghanaians once the President Nana Addo Dankwa Akufo-Addo assent to it.

Kwaku Kwarteng who is also the MP for Obuasi West Constituency in an interview with the said consumers of petroleum products will soon see the effects of the amendments at the pump.

“We should see some significant effects in the price of fuel in the country soon, especially at the pump. This is because the special Petroleum Tax and the Customs and Excise tax on petroleum with its levies have all be removed and some reduced.

Am unable to tell how much that will be because we are operating a deregulated regime in the petroleum downstream sector, with individuals that sell these petroleum products choosing how much to sell their products.

But what these interventions are seeking to achieve is to reduce government's contribution to the price build-up.

“So, the special petroleum tax that has been reduced from 17.5% to 15% would bring some relief, the exercise duty tax that has been abolished would also bring some relief. In the area of electricity tariff, the reduction of the national electrification levy will bring some relief, the reduction of public lighting levy would bring some relief as well,” he added.

Fuel prices since the beginning of 2017 have seen a gradual increase between 4% and 11% due to the volatility of the country’s local currency. This currently has forced transport operators to call for an increase in transport fares for some time now.

Though the GPRTU and other transport unions have warned the commuting public not to accept an increase in fares from some drivers, the can report that commuters have become vulnerable as some drivers have increased their fares despite the directive from their mother unions.